Ministry Hunts For More Psus That Can Get Navratna Status

The industry ministry is hunting for more profit-making public sector undertakings (PSUs) which could be shaped into global players on the line proposed for Navratna PSUs.

The three PSUs which are showing potential for this treatment are Gas Authority of India (GAIL), Mahanagar Telephone Nigam Limited and Bharat Aluminium Company Limited, ministry sources said.

While GAIL narrowly missed the list of first choice of PSUs for government support, for which an autonomy package is now under the consideration of the Union cabinet, the other two have shown enough strength for developing into global giants, they said.

Elaborating, the sources said that the petroleum ministry did not want GAIL to be included in the first list as four of its PSUs Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum and Oil and Natural Gas Corporation were already in the list of Navratnas.

 

Incidentally all the three PSUs in the reckoning now have been recommended by the Disinvestment Commission for varying degree of dilution of the governments holding.

Ministry sources also indicated that GAIL and MTNL along with Indian Oil Corporation (IOC) would be cleared by the Union cabinet for disinvestment in the current financial year for meeting the Rs 4,800 crore budgetary target. The cabinet could not take a final view on the Navratna package at its meeting on Tuesday for paucity of time while the finance ministrys proposal for disinvesting three PSUs did not come up for discussions.

There have been a series of meetings in the Udyog Bhawan to explore inclusion of more PSUs in the globalisation effort.

Some of the meetings were chaired by industry minister Murasoli Maran himself, the sources said. If the PSUs were to survive in India they would have to be provided a level-playing field and government would give all possible support to the profit-making corporations to enlarge their area of operations and influence, both nationally and internationally.

While holding a series of discussions with PSUs chief in the recent past, Maran had said that after the approval of the Navratna package he would concentrate on other profitable PSUs.

The Disinvestment Commission in its first report had suggested shedding of upto 49 per cent of government shares in Balco.

saying, The PSUs strong finances and its near monopoly position in business will help attract both institutional as well as small investors interest.

Suggesting an immediate 25 per cent disinvestment, the Commission said at present no business for technological restructuring was warranted in GAIL whose profits soared from Rs 94.2 crore in 1992 to Rs 515.5 crore in 1996.

Balco, whose return on capital employed jumped from 3.6 per cent in 1992 to 21 per cent in 1996, figured in the second list of PSUs recommended by the Commission for Disinvestment on the strength of impressive financial results in the last few years and its profitability in fiscal 1996.

In case of MTNL, which figured in the third and latest report, the Commission recommended establishment of a pre-investment board to protect the management against action in respect of even bona fide commercial decisions.

It said such a measure would be crucial in the case of MTNL as its management gears up to face the threat of competitors skimming the cream with their aggressive sales and pricing policies.

Recommending divestment upto 49 per cent for MTNL, which has the advantage of monopoly status, the Commission said though MTNL was not selected in the original list of Navratnas, its track record over the last decade makes it a strong performer.